How institutional bets on December $100,000 calls could shape the market

Despite the lower overnight spot price, the data suggests considerable institutional interest in the December 2024 $100,000 calls.

This signals even stronger confidence in a year-end rally for the world’s biggest cryptocurrency, especially as the likelihood of former US President Donald Trump’s victory increases.

Important institutional interest

In its latest update, crypto trading firm QCP Capital said Bitcoin price action has been resilient despite ongoing challenges such as the continued supply of Mt. Gox and the decline in stocks. This stability could indicate that the market has largely overcome its earlier concerns.

Perpetual funding rates have normalized, volatility is easing, and Bitcoin appears to have settled back into its familiar $61,000-$71,000 trading zone, where it remained throughout the second quarter. In the short term, the asset’s spot price could continue to fluctuate within this band, especially with dealers holding “very long” positions at the July 26 $67,000 strike.

However, the market is showing strong anticipation for a breakout as the US election approaches. In particular, there is substantial institutional interest in the December $100,000 calls, reflecting a strong belief in a year-end rally, due to the increasing odds of a Trump victory.

Public support for Trump in the tech industry has surged in recent months. His chosen running mate, Ohio Senator JD Vance, not only brings experience as a venture capitalist, but is also a vocal supporter of Bitcoin and other cryptocurrencies.

Thanks to Trump’s new stance on Bitcoin, numerous influential tech figures, many with crypto affiliations, have recently endorsed or given financial support through aligned political action committees. Those supporters include Elon Musk, the Winklevoss twins and partners at one of Silicon Valley’s largest venture capital firms: Andreessen Horowitz.

While the Biden administration is showing pragmatism in approving spot Ethereum ETFs, Trump remains a popular choice. In fact, Standard Chartered recently predicted that Bitcoin could rise to $150,000 if Trump wins the presidency.

Biden, 81, has also come under increasing pressure from members of his own party to withdraw from the race after his disastrous debate with Trump, 78.

In an interview Wednesday, Biden said he might reconsider his decision to stay in the race if an illness arises. Additionally, a recent AP NORC poll also found that a majority of Democrats say he should step down in favor of someone else.

Will Biden’s potential victory spell trouble for US crypto?

Amid growing support for Trump within crypto circles, it’s worth noting that discussions about the future of the industry under different political leaderships are intensifying.

Ethereum co-founder Vitalik Buterin recently urged voters to exercise caution when voting for political candidates who claim to support digital assets without fully understanding the fundamentals and goals of the technology.

Buterin refrained from disclosing any names in his position of any of the political candidates, but still drew criticism from Cardano’s Charles Hoskinson, who strongly opposed the 30-year-old executive’s position and said re-election Biden could trigger the demise of the American crypto industry.

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